RattanIndia Power Ltd

Rajiv Rattan

Chairman

I am immensely delighted and enthralled to pr esent the Annual Report for FY 2023-24, which showcases our sustained operational and financial excellence, as well as our growing perseverance. In FY 2023-24, your Amravati Power Plant recorded its best operational performance to date, particularly evident in the highest-ever income and collections.

Increasing demand due to growing population, momentum in economic activities, and improvement in per capita electricity consumption have set new benchmarks every year. This, coupled with easy access to capital, favorable policy and regulatory initiatives taken by the Government of India, has positively redefined investors' outlook toward the sector, resulting in a capacity addition of approximately 26 GW during FY 2023-24, with total installed capacity reaching around 442 GW as of 31st March 2024. It would not be an overstatement to say that the momentum gained in the past years is only going to increase in the years to come.

In 2022, the Indian economy achieved a significant feat by becoming the 5th largest economy globally after overtaking the United Kingdom. Today, in the backdrop of economic and policy measures, ease of doing business, attractive foreign investments, and robust consumer demand, India is all set to become the 3rd largest economy in the next 2-3 years, surpassing

Japan. In FY 2023-24, Real GDP was estimated at 8.2%, compared to the growth rate of 7.0% in FY 2022-23. Nominal GDP witnessed a growth rate of 9.6% in FY 2023-24. Sustained economic development is paramount to achieving the target of making India a USD 5 trillion economy, with a foundation being laid through a massive focus on infrastructure sectors like roads, rail ways, ports, power, airports, etc., in terms of policy initiatives and access to capital.

Fiscal year 2024 has been a very proud year in terms of our performance, with your 1350 MW Amravati Plant being rated among the top-performing plants not only in the state of Maharashtra but in the entire country. The Amravati Plant ended FY 2024 with an annual availability of 86% and the highest-ever annual Plant Load Factor (PLF) of 82%.

Industry Developments

The Power Sector in the past year has witnessed several transformational changes that have redefined the entire sector. The favorable policy and regulatory initiatives taken by the Government of India have instilled optimism among the stakeholders. The outlook for the power industry's future in India is bullish due to accelerated capacity addition in the renewable space, growth in T&D infrastructure, and access to capital through various financing instruments, resulting in a favorable investment climate.

Historically, power generation has grown manifold since independence, with growth in demand being even higher due to accelerating economic activity, increasing electrification, and rising per-capita usage. This, in turn, led to the country witn essing an all-time high peak power demand of 250 GW on 30th May 2024.

India is on course to becoming the third-lar gest economy, which will significantly re sult in a multi-fold increase in energy de mand. As per the National Electricity Plan published in May 2023, the projected all-India peak electricity demand is 277.2 GW for the year 2026-27 and 366.4 GW for the year 2031-32.

Along with the peak demand, the base load of the country, which is primarily met by thermal capacity, has also been on an increasing trajectory. This is evident from the fact that the all-India thermal PLF during FY 2023-24 increased to 69.09%, the highest in the past decade. This indicates the critical role played by thermal capacity in meeting the base load amid growing demand in the country. The Government of India has also envisaged the requirement of around 63,900 MW of additional conventional capacity, for 31,880 MW by FY 2026-27 and another 32,080 MW during FY 2027-28 to FY 2031-32. This warrants the development of new thermal capacities from scratch.

I would like to state that the need to add thermal capacity is now well acknowledged. Thermal ordering of 4-5 GW per year is expected in the coming years, and I strongly believe that thermal coal-based power plants will continue to be the backbone of electricity generation in the country. Your Company is set to play a dominant role in India's success story.

Company's performance in fiscal 2023-24 reaching new heights and setting new benchmarks

The performance of your Company in fiscal year 2023-24 has been a te stament to your continued commitment to powering the nation's development and enhancing stakeholders' value. FY 2023-24 has been the best year for your Company, as your Amravati Plant outperformed all its previous records by registering the highest-ever PLF of 82.3%. The plant has continued to be availab le at more than the normative levels of 85% as required in the Power Purchase Agreements, thereby ensuring the recovery of one hundred percent of its entire capacity charges.

Backed by strong demand, your Company has started selling 28 MW of surplus power generated from the Amravati Plant, over and above the existing long-term contract with MSEDCL, on the Indian Energy Exchange (IEX), thereby maximizing revenue. The strong operational performance of your Company and the sale of surplus uncontracted power in IEX resulted in your Company booking revenue of 3,734 Cr. in FY 2023-24, the highest ever.

The Company has always placed the utmost importance and priority on nurturing trust and strong relationships with stakeholders. Our continuous and proactive engagement with various stakeholders, such as SECL, ensured fuel security with the highest ever receipt of coal rakes totaling 1,645, with a daily average of 4.5 rakes.

Similarly, continuous engagements with MSEDCL resulted in the highest-ever collection of Rs. 4,011 Crore, which also includes the receipt of disputed receivables of Rs. 747 Crore. Based on the favorable judgment from the Hon'ble Supreme Court of India on 27th March 2023, in the long-standing dispute with MSEDCL regarding the recovery of additional costs of procurement of alternative coal and changes in taxes and duties, under which MSEDCL's appeal against the APTEL order was dismissed, your Company received Rs. 553 Cr. of disputed receivables from MSEDCL in FY 2023-24. Your Company continues to pursue the early release of the balance amount.

Your Company also received a favorable order from the Hon'ble Supreme Court of India on 20th April 2023 in the dispute with MSEDCL towards the reimbursement of Evacuation Facility Charges. Pursuant to this order, your Company received the disputed receivable of 26 Cr. from MSEDCL in FY 2023-24. Additionally, your Company received a favorable order from the Hon'ble APTEL on 6th February 2024 in the matter of compensation for the penalty levied by SECL for short-lifting of FSA coal. Pursuant to this order, your Company received the disputed receivable of 69 Cr. from MSEDCL. Your Company continues to pursue the early release of the balance amount.

Your Company continually reviews and refines its SOPs and procedures related to plant operations to achieve excellence in performance across key areas related to operational, financial, and business practices, to meaningfully impact the profitability of the Company. Additionally, your Company is also working to make existing processes more robust and resilient to deal with the new normal.

In terms of financial performance, the Company has sustained stellar financial results for the year ended 31st March 2024. RPL ended fiscal 2024 with an EBITDA of 1,002 Crores.

Backed by exceptional operational performance and recovery of disputed receivables from MSEDCL, pursuant to favorable orders from the Hon'ble Supreme Court and APTEL, the Company has been meeting and successfully servicing its debt obligations (both principal and interest) ahead of schedule. By 30th June 2024, it had repaid 791.13 Cr. (including principal and interest). For the second consecutive year, the Company made a prepayment of 348 Cr. This has resulted in the total secured external debt outstanding (principal) reducing to 437 Cr. as of 30th June 2024.

Conclusion

Lastly, on behalf of the Board, I take this opportunity to thank all our stakeholders shareholders, customers, vendors, employe es, bankers, financial institutions, partners in the Amravati Project, and other partners for reposing their faith in us and motiva ting us to excel across all facets of our business. I look forward to your continued support and confidence in the Board of your Company to help us achieve an even better year ahead. I would li ke to end by reiterating our continued commitment to excellence in everything we do and ensuring maximum value to our shareholders.